What’s in store in ’24? Andrew Crabbie quoted in BE news
30 January 2024
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Andrew Crabbie, Partner and Head of Commercial Real Estate, has been quoted in BE News offering his predictions for 2024, alongside other leading industry figures.
Crabbie highlighted the importance of high quality, sustainable office space to occupiers, as Forsters settles into their new office in 22 Baker Street. He stated:
“Planning will continue to be a thorn in the side for developers. Local and national government must get to grips with the planning application bottlenecks (though with a general election looming, it is likely this will be on the back burner). The impact in 2024 of the introduction of biodiversity net gain regulations will prove another challenge to developers. Michael Gove’s decision to refuse M&S’s plans to develop its flagship store on Oxford Street on the grounds that the project was not compatible with the transition to a low-carbon future has amplified the ‘demolish and re-build versus retrofit’ debate, which will continue to run in 2024. From an occupier perspective, the flight to quality zeitgeist will grow across all assets as companies share the same priority of inhabiting well located, highly amenitised, sustainable and flexible workspace that puts the performance and well-being of its employees at its heart. Indeed, here at Forsters we’re a living, breathing exemplar as in January we’re consolidating our London business into a new headquarters on Baker Street in the heart of Marylebone.”
The full article was published by BE news and can be read here (behind their paywall)
Jo Edwards appears on BBC Breakfast to discuss the government’s announcement of an early legal advice pilot for separating parents
29 January 2024
Uncategorized
Head of Family, Jo Edwards joined Rachel Burden and Charlie Stayt on the BBC Breakfast sofa on Saturday 27 January to explain the significance for separating parents of the government’s announcement of a new early legal advice pilot from this summer.
On Friday 26 January the Ministry of Justice published its response to the “Supporting Early Resolution” consultation, launched last year. The response included the announcement of a pilot scheme to fund the provision of early legal advice for parents and that the government will no longer be proceeding with plans to make family mediation compulsory for separating couples.
Jo welcomed the announcement, as early legal advice can help separating parents understand what their rights and responsibilities are, as well as signpost to all forms of non-court dispute resolution – not just mediation. The government also took on board the consultation feedback, including Jo’s oral evidence to the Justice Select Committee, and dropped proposals to compel couples into family mediation. Whilst mediation can be extremely effective, it’s not appropriate for all couples and works best when entered into voluntarily.
At the heart of the announcement is the protection of children’s wellbeing by avoiding, where possible, lengthy acrimonious court proceedings. The most vulnerable also deserve proper court time and swifter justice. Jo therefore calls for the announcement to coincide with more resources for family courts that currently face significant delays.
For more information about mediation at Forsters, click here.
The Private Client Global Elite Directory was created with the awareness that referrals and recommendations are the key to the private client sector. To know that someone is an excellent technical practitioner is essential, but it is also integral for the maintenance of client relationships that the advisors you refer to your clients are good personality fits and masters of communication. As such, Private Client Global Elite recognised excellent individuals as chosen by their own peers within the private wealth industry.
Lifecycle of a Business – What are your rights as a shareholder?
23 January 2024
News
Setting up and running your own business is an amazing achievement. It requires vision, creativity, motivation and stamina. On occasion, it can even bring you fame, riches and fortune. But it can also result in reams of paperwork and cause sleepless nights. And as someone once said to me about children “It doesn’t get easier, it just changes”, so the same can be said for your business throughout its lifecycle. From setting up to exit, it will force you to consider issues that you might not previously have known anything about and it will need you to make many decisions, sometimes very quickly. What it certainly is not is mundane.
With this in mind, the corporate team at Forsters, together with some of our specialist colleagues, has written a series of articles about the various issues and some of the key points that it may help you to know about at each stage of a business’s life. Not all of these will be relevant to you or your business endeavours, but we hope that you will find at least some of these guides interesting and useful, whether you just have the glimmer of an idea, are a start-up, a well-established enterprise or are considering your exit options. Do feel free to drop us a line or pick up the phone if you would like to discuss any of the issues raised further.
So far, we’ve covered initial considerations, directors and funding, so now let’s have a think about “Shareholders”.
What are your rights as a shareholder?
A company acts through two bodies of people – its shareholders and its board of directors. While the directors manage the day-to-day running of the business, shareholders can still exert a significant amount of influence.
The rights of shareholders are derived from the Companies Act 2006 (the “Companies Act“), the articles of association of the company (the “Articles“) and any shareholders’ agreement in place. The rights attaching to shares will depend on the class (type) of shares that you hold and will vary from company to company. It is therefore important that you fully understand which class(es) of shares you own and the rights which apply to them.
In this article we will consider the key shareholder rights that are provided in the Companies Act.
Attendance and voting at general meetings
Generally, shareholders are entitled to attend and vote at general meetings of the company. However, some classes of shares may not have this right, while others may provide weighted voting rights or a veto right over certain issues; if this is the case, it should be set out in the Articles or any shareholders’ agreement.
Subject to any specific rights set out in the Articles or a shareholders’ agreement, a shareholder’s voting power will usually depend on the proportion of shares held (where the vote is by poll); however, in some instances a vote may be taken by show of hands and in this case, shareholders with a very small shareholding may have a significant impact on the vote. In the main, resolutions proposed at a general meeting will be either an ordinary resolution or a special resolution. An ordinary resolution is passed by simple majority (i.e. over 50%) while a special resolution must be passed by 75%.
In addition, subject to certain conditions being satisfied, shareholders have the right to require the directors to call a general meeting, the right to require the company to circulate a written resolution and the right to require the directors to circulate a statement with respect to a matter referred to in a proposed resolution or other business to be dealt with at a meeting.
If you are unable to attend a general meeting, you should be able to appoint a proxy to attend the meeting and vote on your behalf.
Right to dividends
Most shareholders will have the right to receive a share of the company’s profits in return for their investment. If a company is profitable, the directors may decide to distribute profits to shareholders by declaring the payment of a dividend (usually in cash).
Although it is the directors who will recommend the payment of a dividend, shareholders may have to vote to approve it (this is usually the case with a final dividend, which is paid once the annual accounts have been drawn up; interim dividends which are paid throughout the year are usually declared by the directors). The shareholders cannot vote to pay a final dividend which is more than the directors have recommended, although they can vote to reduce the amount of the dividend to be paid.
It should be remembered that the directors are under no legal obligation to declare the payment of a dividend. For example, the directors will not recommend a dividend if the company is not profitable or if it is profitable, they may decide that the profits should be re-invested into the business.
Right to return of capital
The share capital of a company is not owned by the shareholders, but by the company. This is to protect the creditors of the company who will often have no control over how the company is being managed and operated. If the company becomes insolvent, its creditors will rank ahead of the shareholders in terms of being “paid back” and if necessary, the share capital will be used to do this. For private companies with a small amount of share capital, this might not be of much help to creditors in reality, but the principle remains.
That said, shareholders do have capital rights and if any share capital remains once creditors have been repaid (although this is unlikely in an insolvency context), this will be repaid to the shareholders, usually in proportion to the number of shares that they hold.
Right to information
Shareholders also have rights to receive certain, albeit limited information, about the company. For example, they are entitled to a copy of the company’s annual accounts and any annual report and can request to see a copy of the company’s register of members, any minutes of general meetings and the terms of the directors’ service contracts.
Pre-emption rights
Under the Companies Act, shareholders have a pre-emption right on the allotment of shares. Such rights may also be included in the Articles or any shareholders’ agreement. These rights aim to protect existing shareholders from having their shareholdings diluted, by requiring the company to give existing shareholders a right of first refusal over the allotment of new shares, usually in proportion to their current shareholding.
Pre-emption rights may also apply on the transfer of shares and if so, these and the process to be followed will be set out in the Articles or a shareholders’ agreement. Such rights require any shareholder wishing to transfer their shares to offer them first to the existing shareholders, again, usually in proportion to their current shareholding.
In determining what rights a shareholder has, much will turn on the Articles or any shareholders’ agreement. It is therefore important to check these before taking any action as a shareholder. Our next article will focus on the protections which may be afforded to minority shareholders.
If you have any queries or concerns about your rights as a shareholder, please do not hesitate to get in touch with a member of our Corporate team who would be happy to assist you.
Disclaimer
This note reflects the law as at 19 January 2024. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice.
Simon Blain to speak at The Practitioner’s Forum on Trusts in Divorce 2024
19 January 2024
News
Family Partner, Simon Blain, has been invited to speak at The Practitioner’s Forum on Trusts in Divorce 2024.
Hosted in London on 15 February, the in-person forum brings together Trust and Family lawyers to discuss the complex issues that can arise from trusts in divorce. It is an opportunity to discover the various perspectives that shape trusts in divorce and gain insight from experienced lawyers on how to navigate these intricacies.
Simon will be joined by Stacey Nevin of Kingsley Napley, Emma Holland of Stewarts and Tom Deely of Howard Kennedy LLP. Their session, ‘Understanding How and When Trusts are Brought into Divorce’ will cover:
Hannah Mantle to speak at The 2024 Practitioners’ Forum on Stress Testing Trust Structures
17 January 2024
News
Contentious Trusts and Estates Partner, Hannah Mantle, has been invited to speak at the ThoughtLeaders4 conference ‘The 2024 Practitioners’ Forum on Stress Testing Trust Structures’ on 18 January in London.
The conference will unite contentious and non-contentious private client practitioners to examine the best practice for enhancing the resilience of trust structures and mitigating risks of attack.
Hannah will be joining Hugh Gunson of Charles Russell Speechlys, Helen McGhee of Joseph Hage Aaronson and Christopher S. Cook of Baker McKenzie for a session, entitled ‘Fortifying Trusts Against Tax Authority Attacks’. In the session, the speakers will cover:
Changes in tax law that could leave a trust vulnerable
Xavier Nicholas recognised as one of the 50 Most Influential in ePrivateclient 2024
17 January 2024
News
Xavier Nicholas, Partner and Head of Private Client, has been named as one of ePrivateclient’s 50 Most Influential in 2024.
The listing identifies the leading practitioners of the private client sector, showcasing 50 of the most talented and highly regarded private client advisors.
Xavier has been recognised for his technical expertise and his ability to advise on the most complex and high-value matters. He was also listed in the 2022 edition.
Jo Edwards joins ITV’s Lorraine alongside ‘Mother Pukka’ founder Anna Whitehouse to share her top tips for a good divorce on so-called ‘divorce day’
10 January 2024
News
Head of Family, Jo Edwards, made a further appearance on ITV’s Lorraine to share her advice for married couples considering a divorce at the start of the year (traditionally the busiest time of the year for couples making enquiries about separation).
Jo stressed the importance of not rushing into a divorce after a difficult holiday period but taking time to reflect, consider counselling, and seeking some initial legal advice.
Jo also discussed with Lorraine the benefits of No Fault Divorce, which has been in place in England and Wales for nearly two years. As separating couples are no longer required to apportion blame as part of the process, a “good divorce” is a reality.
In light of Jo’s appearance on Lorraine here are Jo’s three top tips for a good divorce:
Unless the relationship is abusive, don’t rush to divorce
Try counselling and give thought to what needs “fixing” and how that may be worked on. If there is a divorce down the line, it is more likely to be amicable if you both feel you have given it your all and are emotionally ready.
Don’t use children as pawns
It’s parental conflict, not separation, which is known to cause most damage to children. If you restrict the other parent’s time with the children, or press for strict equal shared care despite the other parent having more available time, that may inflict emotional harm that stretches into adulthood. Children are entitled to grow up understanding the rich fabric of their genetic makeup; usually that means having a meaningful relationship with both sides of their family.
Plan
Surround yourself with a good support network as you go through divorce; have individual therapy; familiarise yourself with the process by reading up. Above all else, be kind to yourself (and to your spouse, if they’re struggling).
Although Jo has extensive experience of taking cases to court where needed, she is well-known for her conciliatory, pragmatic approach and desire to settle even the most complex of cases where possible. As a trained mediator and collaborative lawyer, Jo is one of only a handful of lawyers in London qualified to consult with children in mediation.
Employment Law: Looking Back on 2023 and the Forecast for 2024
5 January 2024
News
It can be tough being an employer: many are still grappling with the new employment landscape left after Covid (such as remote and hybrid working arrangements) and are still trying to understand the expectations of the new generation of worker, all whilst trying to keep up-to-date with a never-ending raft of legislative changes.
The beginning of a new year presents an opportunity to reflect on the year gone by and look forward to the year ahead. With 2024 underway, we reflect on the key employment law developments of 2023 and highlight some anticipated changes for you to look out for in 2024.
Employment Law Review – 2023
2023 was a significant year for employment law. The Retained EU Law (Revocation and Reform) Act 2023 created a suite of new legislation in relation to holiday, working time, TUPE and the Equality Act 2010. There were changes to flexible working and family-related rights that are due to come into effect later this year (2024). In case law, we had landmark judgments in respect of holiday pay and employment status, which offer some long-awaited clarity.
2023 – Important case law developments
Chief Constable of the Police Service of NI v Agnew – holiday pay
In the significant case of Agnew, the Supreme Court held that although an unlawful deductions claim must be brought within three months of the date the last payment was made (or where there is a series of deductions, the date of the last in the series), a gap of three months in deductions does not automatically break the “chain” and neither does a correct payment. A series is not necessarily determined by a period in time but a “common fault or unifying or central vice”. As such, a series of deductions may no longer be broken by a gap of more than three months, meaning an employee could, depending on the circumstances, make a claim in respect of underpayments which were made prior to any such gap.
This decision will have significant implications for employers across the UK. For one, it is likely to cost the Police Service of Northern Ireland £30-40 million in back pay for holiday pay claims. That being said, in Great Britain there is a two-year backstop on how far back holiday claims can go. Nonetheless, this case serves as a notable reminder of the importance of calculating holiday pay correctly.
Independent Workers Union of Great Britain v Central Arbitration Committee (Deliveroo) – employment status
In November 2023, the Supreme Court unanimously held that Deliveroo riders are not employees and therefore cannot be represented by trade unions for collective bargaining purposes. The key factor for determining self-employed status was that the riders have an unfettered right to appoint a substitute to perform their obligations under their contract and in practice.
Whilst the judgment provides clarification to employers (and a helpful reminder that a genuine right of substitution will nearly always mean that an individual is not an employee), it has received criticism regarding the potential risks it poses to vulnerable workers across the UK. The Labour Party has previously indicated a desire to reform the law on employment status and to strengthen the rights and protections for workers. With an election looming this year, this is definitely an area to watch.
Boydell v NZP Limited and other – the enforceability of non-competes
In Boydell v NZP Ltd the Court of Appeal upheld an injunction and the decision of the High Court that it was permissible to sever part of a 12-month non-compete clause. Boydell was employed as Head of Commercial – Speciality Products for NZP Limited (“NZP”). NZP’s business, the sale of bile acid derivatives, is a niche area of the pharmaceutical industry. When Boydell resigned to work as head of the bile acid division of one of their main competitors, NZP sought an injunction relying on the 12-month non-compete in Boydell’s employment contract. Boydell argued that the non-compete was too wide to be enforceable, principally in that it benefitted not only NZP but other companies it its group. The Court of Appeal found that the non-compete clause was clearly directed towards the specialist activities of NZP and therefore the clause was capable of severance. Severing part of the restriction, to remove the benefit to group companies, did not change the overall effect of the non-compete because it was primarily aimed at the specialist activities of NZP. Although this case demonstrates the courts’ flexibility in their approach to construction of covenants, it is a reminder that, to be enforceable, restrictions should be tailored to the specific needs of the business.
The impact of this case may be limited given the government’s proposal to reform the law on non-compete restrictions to a maximum duration of three months (see below).
Charalambous v National Bank of Greece – the disciplinary process
In the Charalambous case, the Employment Appeal Tribunal (the “EAT”) confirmed that it is possible for a dismissal to be fair in circumstances where the dismissing manager does not hold a disciplinary hearing with the employee. Although the dismissing manager was not present at the claimant’s disciplinary hearing, the EAT found that this was corrected at the appeal stage. In upholding the tribunal’s decision, the EAT noted, perhaps surprisingly, that although it is desirable for a meeting between the employee and decision-maker to take place, direct personal communication is not a requirement.
Lynskey v Direct Line Insurance Services Ltd – menopause and discrimination
The case of Lynskey v Direct Line provides a reminder for employers to be aware of the complex issues surrounding menopause and the way in which symptoms can impact performance. It has been established in a number of tribunal cases that menopause symptoms can amount to a disability under the Equality Act 2010. Ms Lynskey was successful in arguing that Direct Line had failed to make reasonable adjustments where the requirement to meet the performance standards of her role put her at a substantial disadvantage in comparison to employees who were not experiencing symptoms of menopause.
However, whilst this case demonstrates that the tribunal may take a more holistic approach to a disciplinary process, it should not be taken as an invitation to dispense with important aspects of procedure.
Higgs v Farmor’s School – belief discrimination
In Higgs v Farmor’s School the EAT found that the tribunal had erred in its finding that Farmor School had not dismissed Ms Higgs for reasons connected to her protected beliefs. Ms Higgs was dismissed following a number of Facebook posts which the school considered to be prejudicial to the LGBTQ+ community. The EAT found that Ms Higgs’s views were protected under the Equality Act 2010 and remitted the case to the tribunal for redetermination. The EAT gave helpful guidance on the legal framework around the right to protection in respect of one’s belief or religion and the factors that should be taken into consideration when determining whether manifestation of belief was so objectionable as to justify the actions taken by an employer.
Haycocks v ADP RPO – the redundancy process
The EAT’s decision in Haycocks v ADP RPO confirmed that a redundancy appeal cannot correct a lack of consultation. How reasonable a redundancy process is will depend on the employer and the circumstances giving rise to redundancy, however this case serves as a reminder to employers of the importance of consultation at a formative stage in the redundancy process.
2023 – Key legislation
Minimum service levels
Following a year (or two) consistently peppered with strikes in the rail, health, emergency services and teaching sectors, the government has now enacted its controversial Strike (Minimum Service Levels) Act 2023, which requires minimum service levels to be maintained, even during periods of strike.
Allocation of tips
We previously provided commentary back in October 2021 on the anticipated Employment (Allocation of Tips) Act 2023. This Act gained Royal Assent in 2023, with the measures coming into effect during 2024. The motivation behind the legislation is to provide workers with fair pay and to ensure that tips are allocated fairly amongst the workforce.
Workers (Predictable Terms and Conditions) Act 2023
Continuing the pursuit of instilling fairness amongst the workforce, this Act was granted Royal Assent in September 2023 and places obligations on employers to give a minimum period of notice of shift patterns or of ad hoc work to their workforce. Moreover, eligible employees will gain the right to request a “predictable work pattern”.
Worker Protection (Amendment of Equality Act 2010) Act 2023
This Act will require employers to take proactive steps to prevent their employees from being sexually harassed at work. The Equality and Human Rights Commission (the “EHRC”) will be publishing new guidance on what proactive steps employers are expected to take. Not only should employers carefully consider the EHRC guidance (when it is published) but they should also review and amend their existing policies to ensure compliance with the new requirements.
Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023
We commented in November 2023 on the changes to holiday pay, TUPE and working time reporting which came into effect on 1 January 2024. The government has now published guidance on calculating holiday pay in line with the changes.
The Employment Relations (Flexible Working) Act 2023
The Employment Relations (Flexible Working) Act gained Royal Assent in July 2023 and was partially enacted on 11 December via the Flexible Working (Amendment) Regulations 2023. With effect from 6 April 2024, all employees will have a right to submit a statutory flexible working request from day one of their employment. We discussed the impact of this legislation here, including the changes required in the way that employers are expected to respond to flexible working requests.
The Carer’s Leave Act 2023
The Carer’s Leave Act received Royal Assent in May 2023 and allows employees who have a dependant with a long-term care need to take leave to care for that dependent. One week of carer’s leave can be taken each year (regardless of the number of dependants an employee may have). Whilst there are notification requirements on the employee, an employer cannot require an employee to supply evidence in relation to a request before granting leave. An employer can postpone a request in limited circumstances.
Extension of the protections from redundancy – pregnancy and family leave
In December 2023, draft regulations were laid before Parliament to bring the Redundancy (Pregnancy and Family Leave) Act 2023 into operation. Under the new Act, from 6 April 2024, protection from redundancy afforded to employees on maternity, adoption or shared parental leave will be extended to employees who are pregnant and returning from such leave. More details on the impact of these protections can be found here.
What Can We Expect In 2024
The bills which gained Royal Assent in 2023 are very likely to be enacted in 2024. This will mean that employees and workers will benefit from the applicable enhanced rights and employers will need to ensure their compliance with any additional policies and procedures prescribed by the new legislation and be alive to the potential claims that an individual could bring.
In addition to legislative changes, there will also be the usual changes to national statutory rates, including those for minimum wage, statutory maternity pay and statutory sick pay, which are summarised below.
in May 2023, the government published its response to the consultation on the reform of non-compete clauses which proposed capping such clauses at three months. This may also be something to look out for in 2024; and
the government’s Statutory Code of Practice on âfire and rehireâ practices should be published in spring 2024.
Undoubtedly the speaking point of 2024 will be the next general election. If, as currently predicted by the polls, the Labour Party is successful, we are likely to see a number of employment law reforms designed to improve workers’ rights and protections.
April 2024 rate changes
National Minimum Wage
Category of worker
2023/2024
2024/2025
Aged 23+
£10.42
£11.44
Aged 21 – 22 inclusive
£10.18
£11.44
Aged 18 – 20 inclusive
£7.49
£8.60
Aged under 18
£5.28
£6.40
Apprentice rate
£5.28
£6.40
Statutory weekly cap
2023/2024
2024/2025
Statutory sick pay
£109.50
£184.03
Statutory maternity, paternity, adoption and shared parental pay together with maternity allowance
£172.48
£116.75
If you wish to discuss the above in any more detail or have any other employment or HR law related issues, please contact Joe Beeston, Partner, Remy Ormesher-Hussein, Associate or Nina Gilroy, Legal Executive, in our corporate group.
Disclaimer
This note reflects our opinion and views as of 5 January 2024 and is a general summary of the legal position in England and Wales. It does not constitute legal advice.
Forsters represent OmLog in taking new logistics lease
2 January 2024
News
Forsters have advised OmLog SpA on the acquisition and legal aspects of the fit out of their new 126,000 square foot logistic hub in Brentwood, London.
OmLog specialises in logistics and technology for the fashion, luxury and lifestyle sector.
Glenn Dunn, Head of Forsters’ Corporate Occupiers group, advised OmLog and was assisted by Owen Spencer and Sarah Cook.
